Marathon Petroleum (MPC) to Buy Back Shares Worth Up to $3B
Oil refining and marketing giant Marathon Petroleum Corporation MPC recently announced that its board has authorized an additional buyback program of shares worth $3 billion. The company still has approximately $2.14 billion remaining from its previous authorization.
Marathon Petroleum plans to fund the buyback program with cash proceeds from dropdowns and limited partner distributions. The decision falls in line with the company’s value creation strategy of increasing capital return to the shareholders. The company had 518.74 million shares outstanding as of now.
The timing of the buyback will depend on market and business conditions. The company can discontinue the process if the conditions are not suitable. The repurchase of a total of $5.14 billion worth shares has no expiration date.
Marathon Petroleum has various options to commence the buyback program including accelerated share repurchases, negotiated block transactions and open market repurchases. Since the company became independent, it has returned approximately $11 billon to its shareholders through the buyback programs. To date, Marathon Petroleum has repurchased 30% of its outstanding common shares.
We would like to remind investors that in the first quarter of 2017, the company returned $420 million capital to its shareholders in the form of repurchases. In total, Marathon Petroleum has returned $610 million capital to its stockholders during this time period.
About the Company
Findlay, OH-based Marathon Petroleum is a leading independent refiner, transporter and marketer of petroleum products. The company, in its current form, came into existence following the 2011 spin-off of Houston, TX-based Marathon Oil Corporation’s MRO refining/sales business into a separate, independent and publicly-traded entity. Marathon Petroleum operates through three segments: Refining and Marketing, Speedway (Retail), and Pipeline Transportation.
Price Performance
In the last one month, Marathon Petroleum’s shares gained 1.21%, outperforming the Zacks categorized Oil Refining and Marketing industry’s loss of 1.57%.
Zacks Rank and Stocks to Consider
Marathon Petroleum presently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the oil and energy sector are Delek US Holdings, Inc. DK and Canadian Natural Resources Limited CNQ. All of these stocks flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Delek US Holdings’ sales for 2017 are expected to increase 37.46% year over year. The company has a four-quarter average positive earnings surprise of 60.68%.
Canadian Natural Resources’ sales for 2017 are expected to increase 46.81% year over year. The company came up with a positive earnings surprise of 30.77% in the first quarter of 2017.
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